Comments on business development and Southern Illinois University at Carbondale by a local.

Wednesday, November 29, 2006

Is SIU stifling the economic development of Southern Illinois?

I can't remember where I read it anymore, but there is this idea that I have held onto -There are two beliefs about making yourself rich, either you believe that all the wealth in the world has already been created, so to become rich you need to take wealth from someone else or you believe that you can create new value and become rich.

When I apply this idea to SIU and the State of Illinois government, I find that SIU and the state act to take wealth out of the private sector and do not create new value themselves. Basically, ever available dollar SIU jumps on (like a linebacker on a fumble) and keeps, where often investing that dollar would bring back 20 dollars later. For example, one of the biggest problems SIU has is the lack of surrounding industries for them to interact with. But SIU is creating this by eliminating money making opportunities and turning those opportunities into petty bureaucracies.

Think of the blossoming of productivity, tax base and entrepreneurship that would happen if SIU started to outsource to local companies, instead of using state bureaucrats.

Why is SIU spending so much of their management attention to supply marginal services, instead of allowing the local business to thrive? We know they aren't doing a good job running their core business. Surely they should be spending 100% of their time trying to figure out how to educate kids and build football stadiums and the like.

If they did away with Dunn-Richman, wouldn't the local bankers do a better job? If they got rid of the motor pool, wouldn't Enterprise rentals do a better job? If they go rid of their ride services, wouldn't the local taxi companies do a better job? If they didn't build apartments, the local landlords would do a better job. If they replace the electricians with local companies running those electricians wouldn't they get better work for less? How about the phone department? The SIU website? The PR department? I'm not saying outsource the professors or other people really doing education, but does anyone think that private industry wouldn't do a better job? Is it possible to manage anything less efficiently then SIU does?

5 comments:

Jonathan Bean
said...

SIU is a socialist enterprise in a capitalist economy. Other state universities interact more effectively with the private (productive) sector.

As you note, purchasing is broken at SIU. Sole source buying often produces ridiculous results. Not to mention all the layers of requirements to prevent corruption and cronyism (why do the rest of us pay the price for crooked politicians in IL?).

More important is the mental "crowding out" effect: southern Illinois has the problem of depending too much on the public trough -- not just SIUC, but prisons, rehab centers, etc. Friedrich Hayek (_Road to Serfdom_) suggested that once government reaches a certain proportion of the economy, it has an enormous -- largely baleful -- influence on the rest. That is southern Illinois in a nutshell.

jon

p.s.: I admire mayor Brad Cole but if I hear of another state grant for economic development rather than an announcement of attracting private capital, I'm going to scream! After all, the government is based on the 1st notion of zero-sum and what people DON'T SEE is that the money could have stayed in the private sector. (See Bastiat's classic essay "What is Seen and Not Seen"). Or, as Milton Friedman put it, “where do you think the money comes from? The tooth fairy?”

After my experiences with outsourced photocopier and printer services at SIUC, I know it's possible for private industry to do worse than SIU. If you tried to use a photocopier at Morris Library before this year, you know what I'm talking about. My understanding of that particular situation is that local businesses are too small to provide what SIUC needs, but SIUC is too small and too far from St. Louis for major companies to invest the energy it would take for SIUC to get decent service.

What you see is people building empires instead of doing what is right. This is a typical bureaucratic reaction to weak management.

> You can thanks the unions and the prevailing liberal attitude on campus that unions are a good thing (because they stick it to big bad business) for that one.

The days of blaming the employees for management problems is over on this blog (not that I ever started). I understand an anti-union feeling, but they are a symptom of bad management and not the reason. The student workers don't do anything and they aren't unionized. Stop drinking the administration kool-aid, it is about management.

Why pay a marketing agency to make a website when you can hire 2 directors, 4 associate directors and an executive committee to do an economic study on the cost effectiveness of outsourcing versus internal creation of a website.... and then have them tell the intern making $7 / hour to write a grant for $50,000........ and then have the intern do it.

About Me

A software engineer by trade, Peter co-founded Bsquare Corporation of Bellevue, WA (Nasdaq - BSQR). His wood shop is stored on pallets, in his new building, so nothing is happening in the shop. Expect work in manufacturing and other industries that might be successful in a rural community.